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1 STATE OF OKLAHOMA
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2 2nd Session of the 60th Legislature (2026)
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3 SENATE BILL 2015 By: Sacchieri
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8 AS INTRODUCED
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9 An Act relating to development incentives; amending
9 62 O.S. 2021, Sections 860, as amended by Section 1,
10 Chapter 145, O.S.L. 2023, and 861 (62 O.S. Supp.
10 2025, Section 860), which relate to the Local
11 Development Act; limiting the amount of incentives or
11 exemptions granted; requiring project plans to
12 include provisions that serve the whole public within
12 a certain jurisdiction; prohibiting plans that
13 exclusively provide incentives or exemptions to
13 private entities; limiting the amount of increments
14 that may be apportioned; requiring certain project
14 plans to include costs that serve the whole public
15 within a certain jurisdiction; prohibiting project
15 plans that exclusively apportion increments to
16 certain project costs; and providing an effective
16 date.
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21 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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22 SECTION 1. AMENDATORY 62 O.S. 2021, Section 860, as
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23 amended by Section 1, Chapter 145, O.S.L. 2023 (62 O.S. Supp. 2025,
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24 Section 860), is amended to read as follows:
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1 Section 860. A. A project plan may contain a provision that
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2 certain local taxes may be subject to incentives or may be exempted
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3 in reinvestment areas, historic preservation areas, or enterprise
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4 areas.
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5 B. The governing body may grant incentives or exemptions from
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6 local taxation only on a portion, not to exceed fifty percent (50%),
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7 of the new investment made. No ad valorem tax incentives or
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8 exemptions may be granted on the value of property which has been
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9 assessed or which is subject to assessment prior to the adoption of
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10 the project plan. No ad valorem tax incentives or exemptions
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11 authorized in this section may be granted for retail establishments.
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12 If a retail establishment is located in property which otherwise
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13 qualifies for an incentive or exemption pursuant to this section,
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14 the incentive or exemption shall not be allowed for that portion of
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15 the property used for such retail establishment. As used in this
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16 subsection, "retail establishment" shall not include an
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17 establishment that provides lodging including, but not limited to, a
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18 hotel, apartment hotel, public rooming house, or motel. No ad
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19 valorem tax incentives or exemptions authorized in this section may
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20 be granted if the property is located in an increment district or as
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21 long as the property is subject to the ad valorem tax exemption for
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22 new or expanding manufacturing facilities as authorized by Section
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23 6B of Article X of the Oklahoma Constitution. In the event of
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24 disposition by lease or sublease to a lessee not entitled to an ad
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1 valorem tax exemption, the improvements placed thereon shall not be
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2 entitled to an ad valorem tax exemption provided for in Section 850
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3 et seq. of this title. Except as otherwise provided by this
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4 subsection, the incentives, or exemptions, which may be full or
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5 partial, may be granted for a period not to exceed five (5) years.
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6 With respect to an establishment, the business of which is described
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7 by U.S. Industry Number 518210 of the North American Industry
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8 Classification System (NAICS) Manual, 2017 revision, such incentives
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9 or exemptions may be granted for a period not to exceed twenty-five
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10 (25) years.
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11 C. No incentives or exemptions may be granted to any business
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12 or firm that is relocating from within the state and is subject to
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13 or in the process of recruitment by two or more governmental
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14 entities within the state unless the governmental entity in which
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15 the business or firm does not locate adopts a resolution giving
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16 their its approval to the granting of incentives or exemptions to
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17 the business or firm locating in the competing governmental entity.
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18 No incentives or exemptions may be granted to an out-of-state
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19 business or firm that is subject to or in the process of recruitment
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20 by two or more governmental entities within the state except as
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21 otherwise provided for in this subsection. The prohibition against
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22 incentives or exemptions to a business or firm relocating within the
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23 state may be waived upon application by the governing body to, and
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24 approval of, the Director Chief Executive Officer of the Oklahoma
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1 Department of Commerce. In order for the Director Chief Executive
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2 Officer to approve the waiver, the Director Chief Executive Officer
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3 must find that the incentives or exemptions are necessary and
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4 sufficient to attract the business or firm and that the benefits
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5 generated by the business location outweigh the costs of the
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6 business location.
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7 D. A project plan may contain a provision that ad valorem taxes
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8 may be exempted in a commercial historic preservation area that is
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9 adjacent to and serves designated historical residential areas for
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10 neighborhood commercial preservation purposes in order for the
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11 neighborhood to retain its basic character and scale. No ad valorem
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12 tax exemption may be granted on the value of property which has been
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13 assessed or which is subject to assessment prior to the adoption of
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14 the project plan. No ad valorem tax exemption shall be granted
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15 pursuant to the provisions of this subsection for single-family
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16 residences. The governing body may grant the exemption only on the
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17 increase in value of the property. The exemptions may be granted
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18 for a specific period of time as determined by a written agreement
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19 between the property owners of the area and the governing body and
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20 may be renewed. Uses of the property eligible for this exemption
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21 may include, but not be limited to, commercial, office, or
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22 multifamily residential use.
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23 E. For increment districts in operation for nine (9) months or
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24 more, on or before the ninetieth day following the end of each
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1 fiscal year, the governing body of a city, town, or county shall
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2 submit a report to the Oklahoma Department of Commerce. The
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3 Department shall provide a copy of the report to any member of the
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4 public upon request. The disclosure report shall include the
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5 following information:
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6 1. The amount and source of revenue captured and apportioned
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7 pursuant to the project plan;
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8 2. The amount and purpose of expenditures;
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9 3. The amount of principal and interest due on outstanding
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10 bonded indebtedness;
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11 4. The tax increment base and current captured appraised value
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12 or the other local tax or fee collections retained by the area;
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13 5. The captured appraised value or the other local tax or fee
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14 collections shared by the city, town, or county and other taxing
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15 entities, the total amount of tax increments received, and any
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16 additional information necessary to demonstrate compliance with the
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17 plan adopted by the city, town, or county;
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18 6. The name of the person who is currently in charge of the
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19 implementation of the plan; and
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20 7. The names of the persons who have disclosed an interest as
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21 required pursuant to Section 857 of this title and the interest
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22 disclosed.
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23 F. For those incentive districts in operation for nine (9)
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24 months or more, on or before the ninetieth day following the end of
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1 each fiscal year, the governing body of a city, town, or county
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2 shall submit a report to the Oklahoma Department of Commerce. The
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3 Department shall provide a copy of the report to any member of the
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4 public upon request. The disclosure report shall include the
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5 following information:
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6 1. The parties receiving incentives or exemptions;
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7 2. A general description of the property and the improvements
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8 to be made;
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9 3. The portion and fair market value of the property to be
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10 exempted or that portion of the local taxes to be subject to
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11 incentives or to be exempted;
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12 4. The duration of the incentives or exemptions;
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13 5. Any additional information necessary to demonstrate
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14 compliance with the tax incentives or exemptions;
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15 6. The name of the person who is currently in charge of the
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16 implementation of the plan; and
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17 7. The names of the persons who have disclosed an interest as
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18 required pursuant to Section 857 of this title and the interest
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19 disclosed.
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20 G. Any project plan created pursuant to the provisions of this
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21 section shall include provisions or investments that serve the whole
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22 public within the jurisdiction of the applicable governing body. A
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23 project plan shall not be adopted that exclusively provides
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24 incentives or exemptions to private entities.
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1 SECTION 2. AMENDATORY 62 O.S. 2021, Section 861, is
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2 amended to read as follows:
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3 Section 861. A. A project plan may contain a provision that
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4 the increments from certain local taxes or fees may be used to
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5 finance project costs in areas qualified under the Local Development
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6 Act. The increment from local taxes or fees levied from and after
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7 the effective date of the approval of such plan shall be apportioned
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8 in the following manner for a period not to exceed twenty-five (25)
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9 fiscal years thereafter or the period required for payment of
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10 project costs, whichever is less; provided, however, that for any
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11 increment district established after November 1, 1992, such time
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12 period shall be tolled for a period of time equal to the pendency of
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13 any litigation directly or indirectly challenging the increment
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14 district or apportionment or disbursement:
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15 1. That portion of the ad valorem taxes which are produced by
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16 the levy at the rate fixed each year by or for each such ad valorem
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17 taxing entity upon the base assessed value of the increment district
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18 determined pursuant to Section 862 of this title and as to an area
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19 later added to the increment district, the effective date of the
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20 addition to the increment district, shall be paid to each taxing
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21 entity and all or any portion of local sales taxes, other local
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22 taxes or local fees collected each year which are not subject to
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23 apportionment shall be paid or retained as otherwise provided by
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24 law; and
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1 2. All or any A portion not to exceed fifty percent (50%) of:
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2 a. ad valorem taxes, in excess of such amount specified
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3 in paragraph 1 of this subsection,
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4 b. the increment of local sales taxes, other local taxes
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5 or local fees, or a combination thereof, paid to or
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6 for the benefit of the city, town, or county approving
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7 the plan, and
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8 c. with its consent, evidenced by agreement in writing,
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9 the increment of local sales tax, other local taxes or
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10 local fees, or combination thereof, payable to any
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11 other local public taxing entity,
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12 shall be apportioned to, and when collected, shall be paid into an
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13 apportionment fund established for the project pursuant to the
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14 project plan. Such revenues shall be used for the payment of the
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15 project costs and for the payment of the principal of, the interest
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16 on, and any premiums due in connection with the bonds of, loans,
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17 notes, or advances of money to, or indebtedness incurred to finance
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18 project costs, whether funded, refunded, assumed, or otherwise, for
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19 financing, in whole or in part, eligible project costs. For the
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20 purposes of this section, "local sales tax" means amounts payable to
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21 or for the benefit of a local governmental entity calculated as a
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22 percentage of gross sales whether imposed by ordinance, resolution,
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23 covenant, or agreement. Nothing shall prohibit the increments from
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24 being used to directly pay eligible project costs. When all
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1 eligible project costs and such bonds, loans, advances of money, or
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2 indebtedness, if any, including interest thereon and any premiums
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3 due in connection with them, have been paid and the governing body
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4 adopts an ordinance or resolution dissolving the tax apportionment
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5 financing, all ad valorem taxes upon the taxable property within the
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6 boundary of such district shall be paid into the funds of the
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7 respective taxing entities.
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8 B. If a project plan contains a provision for apportionment as
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9 provided in subsection A of this section, and notwithstanding any
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10 other provision of law to the contrary, the governing body shall
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11 direct in the resolution or ordinance approving the plan which
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12 portion of the increments, including whether if any or all, to be
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13 paid into the apportionment fund shall constitute a part of the
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14 general fund to be appropriated annually by the governing body, and
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15 which portion, including whether if any or all, shall constitute
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16 funds of a public entity authorized to issue tax apportionment bonds
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17 or notes or to incur project costs.
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18 C. To the extent that collections exceed project costs and the
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19 provisions for payment of principal and interest along with
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20 sufficient reserves on any bonds issued pursuant to the provisions
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21 of Section 863 of this title, the excess shall be paid into the
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22 funds of the respective taxing entities unless the taxing entity
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23 agrees to some other use of such collections.
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1 D. Except as provided in subsection E of this section, for any
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2 year in which taxes or fees are apportioned in the manner specified
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3 in paragraph 2 of subsection A of this section, any increase in
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4 assessed valuation of taxable real property or taxable personal
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5 property within the boundaries of such district in excess of the
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6 base assessed value shall not be considered by any taxing entity in
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7 computing any debt limitation or for any other purpose except for
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8 the levy of taxes and in determining the amount to be apportioned.
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9 E. In the event there is a change in the assessment ratio for
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10 ad valorem tax property valuations of property within the boundaries
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11 of an increment district, the portions of valuations for assessment
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12 pursuant to paragraphs 1 and 2 of subsection A of this section shall
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13 be proportionately adjusted in accordance with such reassessment.
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14 F. Nothing in this section shall be construed as relieving
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15 property in such project area from being assessed as provided in the
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16 Ad Valorem Tax Code of the Oklahoma Statutes, or as relieving owners
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17 of such property from paying a uniform rate of taxes, as required by
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18 Section 5 of Article X of the Oklahoma Constitution.
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19 G. Subject to constitutional exemptions, if property in an
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20 increment district is owned by a public entity and is leased to or
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21 operated for a private use, including, without limitation, use by a
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22 not-for-profit corporation or trust, the portion of the property so
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23 leased or operated shall be assessed by the county assessor as if
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24 such portion of the property were taxable, and, during the term of
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1 the increment district, the public entity owning such property shall
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2 pay or require the user thereof to pay ad valorem taxes or an in
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3 lieu ad valorem tax payment in an amount not less than the amount
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4 that would have resulted if taxes had otherwise been levied on such
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5 portion of the property. If property subject to ad valorem tax in
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6 an increment district is acquired by a private not-for-profit
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7 corporation or public or private trust, it shall continue to be
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8 assessed and subject to ad valorem taxes or an in lieu ad valorem
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9 payment by the user thereof until termination of the increment
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10 district unless and only to the extent of the portion of the
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11 property and the use thereof that is:
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12 1. Acquired to implement the project plan;
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13 2. Converted to a new tax-exempt use by a tax-exempt user; or
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14 3. Entitled to claim a constitutional exemption notwithstanding
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15 statutory provisions.
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16 During the period of an increment district, such nonexempt uses and
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17 interests are severable for purposes of ad valorem and in lieu of ad
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18 valorem assessment and payments, notwithstanding any statutory
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19 provisions to the contrary.
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20 H. Any project plan created pursuant to the provisions of this
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21 section shall include project costs that serve the whole public
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22 within the jurisdiction of the applicable governing body. A project
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23 plan shall not be adopted that exclusively apportions increments to
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24 the project costs of private entities.
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1 SECTION 3. This act shall become effective November 1, 2026.
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Req. No. 3382 Page 12Every fact on this page links to its source, starting with the official bill record.